Insight

Google: The next big thing?

DOES Google want to own the online travel-booking market? There is contrasting evidence.

DOES Google want to own the online travel-booking market? There is contrasting evidence. The internet giant has been increasing its presence in the area in recent years. First it launched Flight Search, a meta-search website that pits it against the two big flight-comparison brands, Skyscanner and Kayak. It introduced the service in America in 2011 and in Europe in 2013. As yet, it does not seem to be taking much of a chunk out of the competition. However, it does have some advantages, including signing up Ryanair, Europe’s second largest carrier by passenger numbers, which has refused to play ball with other comparison websites. Google is also beefing up its hotel listings by adding photographs and virtual tours, as well as showing price information and reviews. This will bring it up against TripAdvisor, the world’s biggest travel website in terms of page views.

All of which suggests it is eyeing a move into the lucrative market. But there is a good reason why it might choose to hold back. Online travel agencies will spend $4.15 billion on digital advertising this year in America alone, according to a report by eMarketer, a research firm (summarised here by Skift). Over half of this is accounted for by just two firms, Expedia and Priceline, which owns Booking.com. Between them this will represent close to 5% of Google’s total advertising revenue in 2014, according to Mark Mahaney of RBC Capital Markets, quoted in the Wall Street Journal (subscription required).